This is Part 3 of a 4-part series.
August 15th, 1971. America’s 108 year run with capitalism was over. The Nixon Shock – or was it? The dog that didn’t bark during the late 1960s gold run was the US Treasury, the only piece left in the Federal Reserve System that could claim some independence from the central bank cross ownership nexus. Its lack of action to either raise official gold prices to slow the withdrawals, or close the gold window earlier as foreign dollars washed ashore onto its financial beachhead suggests collusion in the purposeful destruction of capitalism’s pre-eminent precious metal reserve. We are led to believe that America was propelled by surprise and necessity into its new commercial model divorced from physical gold reserves and silver stockpiles, but when one follows the money what was originally billed as an unexpected emergency reveals a decade long ruthless history of preparation.
The US Treasury wasn’t so passive during the early 1960s and had quickly transformed into a serious existential threat to the central bank cross ownership nexus. Silver had become a contentious issue when the US Treasury’s silver stockpiles decline by 80% in a matter of months during a 1961 purchase run – possibly depleted by banking agents in an offensive action to create artificial scarcity and render it perceived unreliable as money. But President Kennedy halted government silver sales in late 1961 and, after rebuilding the stockpile, signed his fateful Executive Order 11110 in June 1963 directing the US Treasury to issue debt free United States Notes based on a non-fractional 1:1 ratio to the silver stockpile. Thus a new form of American money was born – one that did not pay interest to the central bank cross ownership nexus – and did not conform to the working definition of capitalism. This interest free money was placed in direct competition to the heavily fractional and interest paying “gold based” Federal Reserve Notes in circulation and more than $4.3 billion of this new debt free money was issued. But although these notes were only about 1% of the total M2 money supply,